$68m raised in PMG flagship Pacific Property Fund
Unlisted commercial property funds manager PMG Property Funds Management has fully subscribed an offer to raise $68 million in its flagship fund, Pacific Property Fund.
PMG Chief Executive Officer Scott McKenzie said the offer – in one of New Zealand’s largest directly-held and unlisted commercial property funds – is the largest opportunity the company has brought to market to date.
‘‘Given the current low interest rate environment, the attractive return that Pacific Property Fund is offering investors, and the Fund’s highly diversified nature, we knew there was going to be considerable interest from the public to invest,’’ Scott McKenzie said.
‘‘We believe the speed at which the offer was taken up is a direct reflection of the track record PMG and our funds have demonstrated over time, and investors seeking out reliable alternatives to term deposits.
‘‘On top of that, the recent restrictions and compliance pressures placed on the residential property investment market highlights the strength, historical resilience and ease of investing in an unlisted commercial property fund like Pacific Property Fund.’’
The Pacific Property Fund (the Fund) offers retail investors a strong comparable forecast gross cash dividend of 7.35 cents per share per annum paid quarterly which, at the current share issue price of $1.22 per share, represents a gross cash return of 6.02 per cent per annum (paid quarterly).
From March 2021 to June 2021, the Fund expects to acquire six properties, with four of these properties to be acquired using the funds raised from the offer. Together, the six properties are valued at $128 million.
The properties to be acquired include two high-quality industrial properties (one in Christchurch and Wellington), two A-grade and recently built office properties (Anderson Lloyd House and Nexia House) in Christchurch’s CBD, and two industrial properties in Auckland and Hamilton.
On settlement of all six properties, the Fund’s portfolio will consist of 20 quality commercial properties with 62 tenants located across the country, achieving a total estimated portfolio value of $393 million.
PMG’s chairman, Denis McMahon, said that he is pleased to see the strong response to Pacific Property Fund’s latest offer.
‘‘When we established the Fund in 2014, the aim was to grow a robust and diverse fund which would withstand major economic downturns. I believe that the performance of the Fund through the pandemic in 2020 showed that we have succeeded in doing just that,’’ McMahon said.
Since 1 April 2016, the Fund has delivered a higher than 10 per cent total annualised return to investors.
Pacific Property Fund has also recently been rated the equivalent of a four out of five-star rating regarding its high-quality investment offering by independent investment research house, Research IP.
PMG plans to bring additional investment offerings to market this year in its five unlisted commercial property funds. To find out more on PMG’s investment opportunities should contact PMG’s Investor Relationships Team on 0800 219 476.